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Thursday, May 5, 2011

Priceline.com (NASDAQ: PCLN), the second-biggest online travel agency, is scheduled to release its first-quarter earnings after the closing bell on Thursday, May 5, 2011. Analysts, on average, expect the company to report earnings of $2.45 per share on revenue of $779.45 million. In the year ago period, the company reported earnings of $1.70 per share on revenue of $584.39 million.

Priceline.com Incorporated operates as an online travel company principally in the United States, Europe, and Asia. It provides various travel services, including airline tickets, hotel rooms, car rentals, vacation packages, cruises, and reservation services. The travel industry is continuing to utilize online services to outsource the excess capacity and the company's profitability has expanded rather significantly. What distinguishes Priceline from the rest is its proprietary Name Your Own Price service. While it does sell travel services under the traditional price-disclosed model, the Name Your Own Price service allows customers (that are flexible on the date and time of travel and the choice of supplier) the option to bid for hotel stays and air tickets.

In the preceding fourth-quarter, the Norwalk, Connecticut-based company's net income was $135.73 million, or $2.66 per share, compared to $78.45 million, or $1.55 per share, in the year-earlier quarter. On an adjusted basis, the company earned $3.40 a share in the fourth quarter. Revenue rose t 35.0 percent to $731.32 million from $541.75 million last year. Analysts, on average, expected the company to report earnings of $3.10 per share on revenue of $736.12 million.

At its last earnings call in Febeuary, the company said that it expects adjusted earnings in the range of $2.34 to $2.44 per share for the first quarter. Revenue for the quarter is expected to grow in the range of 29 percent to 34 percent year-over-year. Total gross travel bookings for the quarter are expected to increase in the range of about 45 percent to $50 percent from last year.

The company has benefited from cyclical improvements in the travel economy, including an easing of immediate fears relating to Eurozone sovereign debt, an increasing contribution from fast-growing new markets, particularly non-core Europe and Asia/Pacific. Priceline has a strong foothold in the high-margin hotel bookings segment outside the U.S., facilitated by the acquisition of Bookings.com (for European markets) and Agoda.com (for Asian markets). The company generates bulk of its revenues from Europe. On the downside, Japan’s quake and Middle East unrest might have hurt Priceline. However, continued growth in Europe and Asia could offset the negatives.

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